A Reality Check for Manhattan Real Estate

Sky-high prices in the city’s high-end home market could be softening, some say

By Gina FaridniyaOriginally published on November 03, 2015|Mansion Global|

Some good news for those looking to buy a luxury home in Manhattan: Prices appear to be coming down.

“The summer produced a little bit of a jolt,” said Leonard Steinberg, president of the real estate firm Compass. Uncertainty surrounding China’s economy triggered a drop in U.S. equity markets. The decline took its toll on the city’s residential market, which tends to slow during the summer months, resulting in lower prices for some properties that debuted at higher asks. Steinberg discussed this trend in his most recent LuxuryLetter.

Price adjustments came as a result of “the realization that raising prices irrationally at double-digits is not sustainable forever,” Steinberg said in an interview. Some properties might have been priced for more than what they were worth; others were the result of agents promising higher sales prices in an attempt to secure listings from sellers.

Following a spring where a number of buildings in the city saw particularly high prices, many sellers expected their homes to sell for more than what was realistic, according to Jeremy Stein, a broker for Sotheby’s International Realty. “I’m finding there’s more property that is reasonably priced because sellers are coming to the realization that they can’t continue to escalate,” he said.

To be sure, there are some segments of the luxury market where offers are still coming in at full ask. “In the highest price ranges, I am seeing what I would call a cautious pause by many buyers,” said Stein, noting that the market appears to be slowing for homes priced above the $4 million to $5 million mark. “Below that it still feels like a solid sellers’ market,” he said.